Many people think that one online brokerage firm is the same as another; however, that simply isn’t true. While there are several different firms to choose from, they are all different, and unfortunately, not all are trustworthy. If your goal is to keep your money safe, then it’s going to require some patience, research and due diligence on your part.
What to Look For
One of the first things to look for is experience. Check to see how long the brokerage firm has been in business, and pay attention to online reviews and testimonials. Visit reputable sites for reviews and see if there are any online forums that discuss the firm you’re investigating.
Fees and Policies
While all brokerage firms have transaction fees, they should not be excessive. Compare the fees of at least three firms. Make sure the firms you are comparing are all the same – discount brokers will be less expensive than full service brokers and that is to be expected. Remember, too, that the firm who charges a bit extra may not be all bad. Look at the services they offer to make a true comparison. The main goal is to choose an online brokerage firm that you feel is the most trustworthy.
They should have their policies and regulations listed on their website. The main policy to pay attention to is their withdrawal policy. It shouldn’t be difficult to assess your money. Most firms will have a minimum balance to maintain, but apart from that, you should be able to get to your money fairly easily.
Types of Trades
Some firms only deal with FOREX, others only deal with stocks, and still others deal with several different types of trades. You will have to decide what you want to trade before signing on with a firm. While it’s possible to sign up for more than one brokerage account, it’s easier if you have just one to do all of your trades. This way you can keep track of all of your transactions, while keeping fees at a minimum.
Choosing an online brokerage firm is not an easy process, and there is no ‘one size fits all’ solution. Much of your decision will depend on the type of trader you are, and what your investment/trading goals are. If you are unsure, don’t be afraid to ask the prospective firms for help. It’s part of their job to educate you and help you reach your investment goals.
